Fragrant Harbour A forum for the large number of pilots (expats and locals) based with the various airlines in Hong Kong. Air Traffic Controllers are also warmly welcomed into the forum.

Fuel Contracts

Old 20th Apr 2020, 20:57
  #1 (permalink)  
Thread Starter
 
Join Date: Dec 2016
Location: The Twain
Posts: 112
Fuel Contracts

Can I interest anyone on the 3rd floor in a May NYM light crude May delivery? Just up your street, buy for -38 there must be a bonus at year end for this Lulu...

anxiao is offline  
Old 20th Apr 2020, 21:15
  #2 (permalink)  
 
Join Date: Aug 2008
Location: Polar Route
Posts: 2,009
Originally Posted by anxiao View Post
Can I interest anyone on the 3rd floor in a May NYM light crude May delivery? Just up your street, buy for -38 there must be a bonus at year end for this Lulu...
Gotta put it somewhere... How about all those widebodies sitting on the aprons and taxiways in Hong Kong? That’ll make them heavier for when the season’s first typhoon blows through. Not a serious suggestion!
cxorcist is offline  
Old 20th Apr 2020, 21:50
  #3 (permalink)  
 
Join Date: Sep 2000
Location: The Back of Beyond
Posts: 364
Last time I checked, if you stuck crude oil in the fuel tanks the engines wouldn't be too chuffed about it when you fired them up..
Flying Clog is offline  
Old 20th Apr 2020, 22:08
  #4 (permalink)  
 
Join Date: Jan 2013
Location: Right hand seat of a 777
Posts: 125
Originally Posted by Flying Clog View Post
Last time I checked, if you stuck crude oil in the fuel tanks the engines wouldn't be too chuffed about it when you fired them up..
Would be like the whole VW scandal all over again!

OMAA
OMAAbound is offline  
Old 20th Apr 2020, 22:41
  #5 (permalink)  
 
Join Date: Sep 2000
Location: The Back of Beyond
Posts: 364
It'd be a bloody environmental disaster! We complained about the pollution over Hong Kong before... imagine if all those airplanes at HKIA fired up one by one with oil in the fuel tanks!
Flying Clog is offline  
Old 20th Apr 2020, 22:57
  #6 (permalink)  
 
Join Date: Dec 2005
Location: Hong Kong
Posts: 368
I wonder what price we are paying for fuel right now because oil at the moment is negative $38 . I never thought that I would see that
  • The May US WTI contract fell $55.9, or 306%, to settle at a discount of $37.63 a barrel after touching an all-time low of -$40.32 a barrel
oriental flyer is offline  
Old 20th Apr 2020, 23:06
  #7 (permalink)  
 
Join Date: Sep 2000
Location: The Back of Beyond
Posts: 364
I believe CX is mostly hedged at around 60-70 usd. So not going to be pretty.
Flying Clog is offline  
Old 21st Apr 2020, 01:18
  #8 (permalink)  
 
Join Date: Mar 2006
Location: Australia
Posts: 40
Originally Posted by Flying Clog View Post
I believe CX is mostly hedged at around 60-70 usd. So not going to be pretty.
“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”
― George W. Bush
michigan j is offline  
Old 21st Apr 2020, 01:21
  #9 (permalink)  
 
Join Date: Jul 2018
Location: All over
Posts: 218
Fool me once, shame on you. Fool me twice, shame on me.

Fool me thrice, must be a Cathay Pilot.

Rinse and repeat as necessary.
Slasher1 is online now  
Old 21st Apr 2020, 01:24
  #10 (permalink)  
 
Join Date: Nov 2015
Location: HK-CRoC
Posts: 589
Yep, Oil today at $10.50 bl ... Expect more massive Fuel Hedging losses n 9th floor crying...
Flex88 is offline  
Old 21st Apr 2020, 01:35
  #11 (permalink)  
 
Join Date: Jun 2002
Location: Eden Valley
Posts: 1,791
If an airline can get a massive unsecured loan it must have some heavy backers. Air China must come into play soon? What a victory for Beijing if so.
Gnadenburg is offline  
Old 21st Apr 2020, 03:04
  #12 (permalink)  
 
Join Date: Apr 2002
Location: HK
Posts: 1
Originally Posted by Flying Clog View Post
I believe CX is mostly hedged at around 60-70 usd. So not going to be pretty.

even worse, they will have hedged c 50-70% of expected fuel requirements. As so little flying is being done, that means they need to buy oil at the hedged price that they won’t even be using, ie they are probably now hedged around 200% of fuel...
Freehills is offline  
Old 21st Apr 2020, 08:43
  #13 (permalink)  
 
Join Date: Aug 2011
Location: UK
Age: 49
Posts: 270
Originally Posted by Freehills View Post
even worse, they will have hedged c 50-70% of expected fuel requirements. As so little flying is being done, that means they need to buy oil at the hedged price that they won’t even be using, ie they are probably now hedged around 200% of fuel...
To be fair and put it in perspective, that will also be the same with almost every other airline out there!

You can’t blame decisions made before the pandemic for there outcome now.
highflyer40 is offline  
Old 21st Apr 2020, 10:19
  #14 (permalink)  
 
Join Date: Aug 2008
Location: Polar Route
Posts: 2,009
Originally Posted by highflyer40 View Post
To be fair and put it in perspective, that will also be the same with almost every other airline out there!

You can’t blame decisions made before the pandemic for there outcome now.
True, but maybe CX should have learned their lesson about fuel hedging after losing $4B USD in the last five years and just stick with the spot prices???
cxorcist is offline  
Old 21st Apr 2020, 10:21
  #15 (permalink)  
 
Join Date: Oct 2018
Location: Ferrara
Posts: 1,563
yeah but then what are all the MBA whizz kids going to do to earn their bonuses???
Asturias56 is offline  
Old 21st Apr 2020, 15:17
  #16 (permalink)  
 
Join Date: Aug 2007
Location: Asia
Posts: 124
Originally Posted by highflyer40 View Post
To be fair and put it in perspective, that will also be the same with almost every other airline out there!

You can’t blame decisions made before the pandemic for there outcome now.
AA does not hedge fuel at all, their CEO says it is just not worth it in the long run. Based on the 4B USD we recently lost plus the losses that are coming, I would say he is right. CX has lost more money through their hedging department than they have ever gained. The fact that these people are still employed while continuing to lose billions of dollars for the airline is gross negligence.
Dilbert68 is offline  
Old 21st Apr 2020, 15:26
  #17 (permalink)  
 
Join Date: Mar 2019
Location: FUMOD
Posts: 35
Interesting to note that the fuel hedging loss was equal to 16 months worth of the $2billion per month we are supposedly losing. That’s quite a lot!


Originally Posted by Dilbert68 View Post
AA does not hedge fuel at all, their CEO says it is just not worth it in the long run. Based on the 4B USD we recently lost plus the losses that are coming, I would say he is right. CX has lost more money through their hedging department than they have ever gained. The fact that these people are still employed while continuing to lose billions of dollars for the airline is gross negligence.
Hugo Peroni the V is offline  
Old 21st Apr 2020, 20:01
  #18 (permalink)  
 
Join Date: Aug 2008
Location: Polar Route
Posts: 2,009
Originally Posted by Asturias56 View Post
yeah but then what are all the MBA whizz kids going to do to earn their bonuses???
Why abandon such a tried and true way of stuffing CX cash into the Swire coffers without having to split it with other shareholders or ”the help” (employees)? If you think the Swires aren’t on the other end of these trades, then I have a bridge to sell you...
cxorcist is offline  
Old 21st Apr 2020, 20:19
  #19 (permalink)  
 
Join Date: Dec 1998
Posts: 813
Originally Posted by Dilbert68 View Post
AA does not hedge fuel at all, their CEO says it is just not worth it in the long run. Based on the 4B USD we recently lost plus the losses that are coming, I would say he is right. CX has lost more money through their hedging department than they have ever gained. The fact that these people are still employed while continuing to lose billions of dollars for the airline is gross negligence.
It is likely that a certain HK company may have lost more in fuel hedging in the past 5 years (and the next two or three to come) than they have probably earned in profits since the mid 80's. Fair to say that decades of effort and dedication of it's long suffering staff have effectively been rendered worthless. Oh, the Swire family is still amongst the richest in the UK however.
mngmt mole is offline  
Old 21st Apr 2020, 20:34
  #20 (permalink)  
 
Join Date: Aug 2008
Location: Polar Route
Posts: 2,009
Originally Posted by mngmt mole View Post
It is likely that a certain HK company may have lost more in fuel hedging in the past 5 years (and the next two or three to come) than they have probably earned in profits since the mid 80's. Fair to say that decades of effort and dedication of it's long suffering staff have effectively been rendered worthless. Oh, the Swire family is still amongst the richest in the UK however.
Maybe the Swires’ eternal destinies are less enjoyable than their present circumstances. I hate to admit it, but a part of me hopes so.
cxorcist is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.